FACTBOX-Czech budget forecasts and process

    Oct 16 (Reuters) - Czech political parties are expected to 
launch talks on the 2007 state budget this week, ahead of the 
first of three parliamentary readings required for the draft to 
pass. 
    The Social Democrats say they could support the proposal by 
the outgoing rightist government if it drops a plan to sell a 
small stake in utility CEZ <CEZPsp.PR> to help plug a budget 
deficit [ID:nL16500432]. 
    The following is the outlook for the central state budget 
and the overall fiscal balance, economic forecasts used to draft 
the budget, government borrowing, plus background information on 
the process and timeline of approving a Czech budget. 
 
 BUDGET PERFORMANCE AND OUTLOOK    2007     2006    2005    2004 
 (in bln CZK) 
 Central state budget             -91.3** -102.0*  -56.4   -93.7 
 (in pct of GDP) 
 General government balance        -4.2     -3.5    -3.6    -2.9 
 General government debt            n/a     30.6    30.4    30.8 
 NOTE. ** draft budget; * latest prediction 
    General government balance, as measured under the 
EU-harmonised ESA 95 methodology = central state budget, local 
budgets, healthcare insurers and various agencies and funds. 
 
 ECONOMIC FORECASTS                2007          2006 
 GDP growth (pct)                  4.9           6.0 
 Avg inflation (pct)               3.0           2.8 
 Avg unemployment (pct)            6.7           7.2 
 
 GOVERNMENT BORROWING                     2007     2006     2005 
 Outstanding domestic bonds              772.1    678.5    581.8 
  of which Treasury bills                 82.1    107.1     94.3 
           medium- and long-term bonds   690.0    571.5    487.5 
 State's foreign debt obligations        126.8    122.2    109.4 
 NOTE. The finance ministry has yet to decide whether to borrow 
in international markets next year. 
 
    PARLIAMENTARY BUDGET PROCESS AND TIMELINE 
   * The lower house discusses the budget over three readings. 
The budget committee due to issue a recommendation on Wednesday. 
    * The first reading -- due at a session starting Oct. 25 -- 
locks in revenue and expenditure, and thus also the deficit. 
    * Rejection in first reading means the government must 
submit a new draft 20-30 days after the rejection. 
    * The second reading discusses the proposed changes. 
    * In the third reading, not expected to start before Dec. 
12, the house votes on proposed changes and then on the bill. 
    * A provisional budget comes in when there is no approved 
budget in place by Jan. 1. The provisional budget keeps revenue 
and spending at the same level as in the previous year. 
 ((Compiled by Marek Petrus; Editing by Gerrard Raven; Reuters 
Messaging: rm://marek.petrus.reuters.com@reuters.net; e-mail: 
prague.newsroom@reuters.com or marek.petrus@reuters.com; Tel: 
+420 224 190 477)) 
  Keywords: ECONOMY CZECH BUDGET